Securing a cannabis business license is one of the most critical—and perhaps one of the most daunting—first steps in launching a business in this increasingly complex and competitive industry.
Here, Mackenzie Ditch Wilcox, Associate Director – Compliance/Legal at PharmaCann Inc., a vertically integrated, multistate cannabis operator headquartered in Chicago, shares insight into key components of the application process, including recruiting a team, securing real estate, establishing relationships with the local community and making your application stand out from the crowd.
Editor’s note: Mackenzie Ditch Wilcox will speak at Cannabis Conference from 11:20 a.m. to 12:30 p.m. on Tuesday, Aug. 23, on the “ALL ACCESS PASS: Create A Winning License Application” session alongside Green Rush Consulting writer and business adviser Debby Goldsberry and Tri(chome)angle owner and lead consultant Greg Huffaker. This can’t-miss session will cover how to make your application stand out from the crowd with takeaways for any new or expanding business. Visit www.CannabisConference.com for more information and to register.
Melissa Schiller: What are some of the most important components of writing a cannabis business license application? What should applicants prioritize?
Mackenzie Ditch Wilcox: I would say [they should prioritize] the different elements of the application and [understand] the weight of each element, really thinking about leveraging real estate, leveraging community, [and] focusing on where you can set yourself apart, especially in a merit-based application that has some objective and subjective scoring.
MS: What are some strategies for recruiting team members that can win over regulators?
MW: I would say [applicants should think] about balancing two main fronts. One is the necessary experience, whether that’s in cannabis itself or that’s ancillary businesses. If you’re trying to open a cultivation facility, if you have experienced horticulturists or agriculture-based individuals or security individuals, leverage those different experiences and try to find people with well-rounded backgrounds, ideally with some sort of cannabis or similar regulated industry.
And then the other component, I would say, is really focusing on developing that local connection. With the bigger multistate operators, [find] a local manager for that facility that has ties to the community, that understands that community, and is already kind of embedded in there. I think one way that’s often useful is through community engagement pieces—finding local organizations, local individuals for hiring that could already have that relationship with the community and also security and all your third-party vendors. Developing a local presence at the onset to help bridge that regulatory approval, while also managing the expectations of the host community, [is important] because we’ve seen a lot lately that there’s more and more emphasis on local support and local approvals than there has been in the last five years.
MS: What are some best practices for establishing relationships with local and state officials?
MW: I think the best way to do that is, before you even start to engage with the community, to develop your own business plan. What sets you apart? Why would your cannabis establishment be the best fit for the community? I think [by] having a deck or a talking point about that and really diving into what matters to the community before you even meet with the officials, you can set yourself up for success at the onset.
Then, I would say the more involved and supportive of the community you can be before you apply or receive the license and open, the better that comes across from a scoring standpoint, but also just from a longevity-of-business-relationship standpoint. I always encourage people to meet with the head of the city council or the alderman or the mayor’s office, depending on where it’s located, early in the process to establish what the community is actually looking for and how you can help the community.
MS: You mentioned that real estate is a big component of the business license application. Do you have any tips on finding commercial real estate and navigating that process?
MW: The biggest hiccup I see happening with a lot of individuals is you can’t just do a standard real estate search like you would on Zillow or Redfin for a residential home, mainly because of the zoning restrictions and some of the setback rules that those search engines are not created to find. So, I always say that the first step should be to review the local and state zoning and setback requirements, as well as any other ancillary requirements. Some states require you to have parking. Some states require you to be not within “X” amount of feet of a school—things like that.
Understand those rules first and from there, if you’re going to do the search on your own, understand what areas of the town or municipality that you can go to so that you can start to flag those. And if you’re working with a broker, set those parameters at the onset so that you’re not spending excess time and money negotiating with landlords or sellers and then you come to find out that you’re not allowed to operate or even apply there due to a restriction that’s beyond the standard real estate considerations. I’ve had multiple clients come to me after the fact and say, “We had this great property and then there was a setback issue” or, “We didn’t realize there’s a daycare that’s in someone’s house and that qualifies as a daycare with the state, and now we’ve spent all this money and time, and we can’t actually operate there.”
MS: What are some unique ways to make your application stand out from the crowd?
MW: I would say one thing is to have a centralized theme throughout. We always talk about marketing ourselves with an elevator pitch. In this scenario, develop a centralized elevator pitch that can tie in throughout every part of the application. If your facility’s focus is going to be on advancing cannabis through sustainability, you can still talk about sustainable efforts in every part of your application, even if it’s a security plan or a recordkeeping plan. I think really tying in one centralized theme not only sets people apart, but it gives the graders or the regulators—whoever’s scoring your application—a very good understanding of what your business can actually look like in operation and it’s not just “Here’s x, y and z regulations” regurgitated in different language.
MS: What do you hope attendees will bring back to their business from your session at Cannabis Conference?
MW: I’m hoping they will bring a unique mindset for how they will prepare and tackle the often-daunting task of these applications. Especially as we see more states start to introduce legislation, we anticipate that the applications will get more and more competitive as the market expands. So, [it’s important to develop] a framework or a mindset or a generalized to-do list to help participants feel less overwhelmed by even starting the process. I think 90% of the hurdle in an application is making a decision about which license type, where you’re going to be, and how you’re going to do it. Once you can set those basic parameters, then the rest is just putting pen to paper.
Editor’s note: This interview has been edited for style, length and clarity.
